Services Tags: OCIO

China: Evergrande and Another Move Down

In August we released our newsletter China: From Leader to Laggard, in which we reviewed how China transformed from a top-performing country to a bottom-performing country between 2020 and 2021. We noted that increased regulation was a key reason for this change as new government policies have spooked investors. We highlighted that China has gone through these periods of regulatory change in the past and opined that the market would continue to be jittery over the next six to twelve months before recalibrating to the new environment.

Since then, Chinese equities have continued to fall as global investors focused their attention on Evergrande Group (Evergrande), a Chinese property developer. In this newsletter, we provide a synopsis of the Evergrande story and discuss the market risks.

Read > China: Evergrande and Another Move Down

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Sustainable Investing Post-COVID Views Featured in Benefits Magazine

An article by Marquette investment consultant and partner Linsey Schoemehl Payne was featured in the April 2021 edition of Benefits Magazine. The article, Sustainable Investment Options in a Post-COVID-19 World, examines performance trends for ESG investments, the impact of recent DOL guidance, and steps for evaluating ESG performance.

COVID-19 and the resulting economic recession have created the first sustainability crisis of the 21st century. As the virus spread across the globe in late March 2020, the global economy came to a screeching hald, and stocks experienced a record-breaking decline. While no sector was left unscathed, research showed that investment strategies that integrated environmental, social, and governance (ESG) factors into their approach provided more downside protection compared with those that did not. ESG integration is a returns-based approach, using ESG factors as an additional source of information during the investment manager’s risk analysis process. This article explores the why and how of that resilience in times of market turmoil, as well as the hurdles plan sponsors should consider when selecting investments that are considered ESG or sustainable strategies.

For more of Marquette’s sustainable investing coverage, reference our research here. Linsey previously presented our video series, Sustainable Investing, an introduction to our approach to ESG integration and considerations, and has also authored several papers on the topic. An owner of the firm, Linsey has been with the company since 2016 and has 13 years of investment experience. Linsey is the vice chair of the firm’s sustainable investing group and a member of the OCIO committee. She holds a B.A. in political science from the University of Missouri-Columbia, a J.D. from the DePaul University College of Law, and an M.B.A. with honors from the University of Chicago Booth School of Business.

Benefits Magazine, the monthly publication of the International Foundation of Employee Benefit Plans, covers benefit issues affecting multiemployer, single employer, and public employee plan representatives.

Download PDF > Sustainable Investment Options in a Post-COVID-19 World

Reproduced with permission from Benefits Magazine, Volume 58 Number 4, pages 24-31, April 2021, published by the International Foundation of Employee Benefit Plans (www.ifebp.org), Brookfield, Wisconsin. All rights reserved. Statements or opinions expressed in this article are those of the author and do not necessarily represent the views or positions of the International Foundation, its officers, directors or staff. No further transmission or electronic distribution of this material is permitted. 

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

China: From Leader to Laggard

In 2020, China was a top performer in the global equity market, returning 29.5%. In 2021, however, Chinese equities have struggled thus far compared to many of their peers. While several of the world’s major equity markets have generated double-digit returns year-to-date, China has lost 12.3% with the majority of those losses occurring in the last several weeks.

In this newsletter, we review reasons why China has transitioned from leader to laggard — with a focus on recent regulatory actions by the Chinese government — and discuss future prospects from here.

Read > China: From Leader to Laggard

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

2021 Halftime Market Insights Video

This video features an in-depth analysis of the first half of 2021, reviewing general themes from the second quarter and risks and opportunities to monitor in the coming months.

Our Market Insights video series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real estate, infrastructure, private equity, and private credit, with presentations by our research analysts and directors.

Sign up for research alerts to be notified when we publish new videos here.
For more information, questions, or feedback, please send us an email.

Value vs. Growth: Where Do We Go from Here?

In a reversal of trends that had persisted for several years, value stocks have largely outperformed their growth-oriented peers since the fourth quarter of 2020. Though many factors have contributed to this change in investor sentiment, the resurgence of more cyclical areas of the market is likely being driven by the successful rollout of COVID-19 vaccines, which appears to have ended the pandemic in the United States and allowed the domestic economy to reopen to a significant extent. With equity markets likely pricing in a full economic reopening in the coming months, many investors are wondering if recent trends are sustainable, especially given the headwinds experienced by the value factor during the last decade. The aim of this newsletter is to assess the prospects of value stocks going forward in relation to those of their growth counterparts.

Read > Value Vs. Growth: Where Do We Go from Here?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

The SPAC Explained

The SPAC once again rose to prominence in 2020 and momentum has continued to build this year. By mid-March 2021, the number of SPACs raised had already eclipsed the total raised in 2020. SPACs, special-purpose acquisition companies, are shell companies set up to raise money to acquire another, existing company. SPAC vehicles have been around for decades but have recently risen in popularity as experienced investors and management teams have chosen this route to decrease the risks associated with a traditional initial public offering (IPO).

In this newsletter, we explain how SPACs work and are structured, typical attributes of SPAC sponsors, who benefits from the SPAC structure, why SPACs have seen such exponential growth recently, and how private equity interacts with and influences the SPAC industry.

Read > The SPAC Explained

For more Marquette coverage on SPACs, reference our recent research, What’s Next for SPACs? and The Year of SPACs.

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Q1 2021 Market Insights Video

This video features an in-depth analysis of the first quarter’s performance by Marquette’s research analysts and directors, reviewing general themes from the quarter and risks and opportunities to monitor in the coming months.

Our Market Insights series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real estate, infrastructure, private equity, and private credit, with presentations by our research analysts and directors.

Sign up for research alerts to be notified when we publish new videos here.
For more information, questions, or feedback, please send us an email.

Retirement Basics Video Series

This video series is intended for plan sponsors and fiduciaries and covers a variety of topics related to creating and managing effective defined contribution investment programs. Co-presented by members of our consulting and research teams, these videos present the basics of retirement plans for trustees and investment staff in an educational format meant to provide guidance and insights on best practices and trends in the industry.

The series includes:

  • Fiduciary Checklist, an overview of the roles and responsibilities of fiduciaries including planning, oversight, communication, and documentation;
  • Defined Contribution Topics & Trends, industry trends and recent developments and guidance from the Department of Labor;
  • Investment Lineup Best Practices, considerations and guidance for selecting investment lineup offerings for retirement plans;
  • Target Date Funds, a deep dive into TDFs, from structure and glidepaths to why target date funds have become so popular; and
  • Stable Value Funds, an overview of stable value, exploring structure, important considerations, and recent litigation.

View each episode in the player below — use the upper-right list icon to access a specific presentation.

For more information, questions, or feedback, please send us an email.

Commodities: Cycle or Cyclical?

A commodities supercycle is generally defined as a sustained period of broad-based above-trend movement. In the first quarter of 2020, almost a decade of commodities price weakness was capped off with a more than 20% drop, and since then, prices have rebounded more than 40% to levels last seen in 2018, inspiring headlines debating whether this is the start of the next supercycle. Proponents argue reopening demand, a potential uptick in global growth and inflation, and a weaker U.S. dollar, among other factors, point to yes. Skeptics contend that an initial demand normalization complicated by temporary supply disruptions does not a supercycle make, at least yet. Commodity price movements can be especially volatile given lumpy physical market characteristics. Oil prices moving into sharply negative territory last April demonstrate exactly that. Whether this latest move is cyclical and temporary or structural and sustainable is still to be determined.

In this newsletter, we explore a few of the key factors that could support or suppress a sustained commodities bull market.

Read > Commodities: Cycle or Cyclical?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

What Does the Latest Stimulus Mean for the Economy and Fixed Income Markets?

President Joe Biden signed the $1.9 trillion pandemic relief package yesterday amidst rising inflation and interest rates since the beginning of the year as the markets price in future growth. With Fed Chair Jerome Powell’s recent reaffirmation of the central bank’s accommodative monetary stimulus, continued vaccine rollout, a drop in COVID-19 cases and deaths, and Biden’s statement that the U.S. will have enough vaccines for every adult by the end of May, a key question on many investors’ minds is, “How much more inflation and rising interest rates could we expect in the road ahead?” This edition of Marquette Perspectives will attempt to answer that question by examining this relief aid in connection with vaccination progress and the economic recovery.

Read > What Does the Latest Stimulus Mean for the Economy and Fixed Income Markets?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.